It is no secret that the Ag industry has seen some difficult times. Even though the markets are doing well at this point, it doesn?t rewrite the years of tough prices in the commodity markets. While Ag lending changes from year to year, an astronomical amount of the farming populace relies on some type of lending plan to keep them operating year to year.
A new bill in the U.S. House of Representatives is aimed at keeping the playing field level for all ag lenders, thus creating more competition. This could lead to some lower rates for farmers.
Iowa Representative Randy Feenstra (R- 4th) joined a bipartisan effort to bring some benefits to rural banks who are competing for lending business. He joined Wisconsin 3rd District Democrat Ron Kind to introduce the Enhancing Credit Opportunities in Rural America Act (ECORA). The bill is designed to remove some tax barriers for community banks. This could lower interest rates for Ag loans from 1.5-2%.
You may be wondering how removing a tax barrier to a local bank can benefit a farmer who needs to get a loan. Feenstra explains how it levels the playing field by giving banks an advantage long possessed by other Ag credit institutions. He is glad that this is a bipartisan effort and is pleased the Representative Kind asked him to be a part of it.
No matter what the current market climate is, farmers are always going to need funding to keep operating. Feenstra says this also helps rural banks stay prosperous by being able to compete for more business. That, in turn, can help the local economies of which they are a part.
Feenstra discusses the timetable for advancing this bill through the House.
